How Does Stock Conversion Work in Warehouse Management?

July 11, 2018

Stock or inventory conversion is an integral part of warehouse management. How well a company performs this task can mean the difference between failure and success profit wise. Stock conversion is simply the process of turning unsold inventory into sold merchandise. When your inventory just sits on the shelves taking up space, it is not earning you any revenue. Also, you have to practice this conversion all throughout the year to obtain maximum results. The following steps show you how to be efficient in this area of warehouse management.

Track Your Inventory

You need to track incoming, in-stock and outgoing stock at all times. This tracking allows you to control your inventory efficiently and accurately. By doing this, you can eliminate shortages and for that fact, overages in stock, both of which can decrease your profitability. Today, computer software, barcodes and other help aids are available to perform this tracking quickly and effectively. You can even receive reports from the software on a wide variety of details about your stock.

Determine the Slow and Fast Movers

From your inventory tracking, determine your slow and fast movers in your stock. This is important due to the fact that it is easy to overstock slow movers and limit your storage space of your fast movers. You can balance out your stock and even save money when you are vigilant about this.

Push to Sell Slow Movers

Once you distinguish the slow movers from the fast ones, take measures to push the slow movers to sell them at a more rapid rate. Additional promotional ads and sales are two ways of accomplishing this in an ideal way. Not only will you increase your revenue by doing this, but you also will make room on the shelves for more fast moving stock.

Discover Your Inventory Turnover Ratio

Another part of stock conversion is to know your stock or inventory turnover ratio. You can figure this by measuring the number of times that your stock is sold within a specified period of time. Thanks to present computerisation methods, you can figure this ratio easily and accurately for each one of your stock items if you so desire. If your ratio is too low, this points to possible liquidity problems. Of course, the ideal rate is different for each company and therefore, you must customise it to fit your unique circumstances.

Hiring our third-party logistics company, Challenge Packaging and Warehousing Solutions, is an effective way to ensure that your stock conversion is performed in the ideal way. We specialise in this service along with a wide assortment of other services that will help your business be as profitable as possible at all times.

Contact Us

Address: Unit 3, 8 Weddel Court Laverton North,
Vic 3026

Telephone: (03) 83609736
Fax: (03) 83609738
Email: info@cpacks.com.au

Optimized by NetwizardSEO.com.au